Ensuring a Fair Workplace

Lynda McAlary-Smith, Fair Work Ombudsman

There are a lot of things to consider when purchasing a franchise in the food services industry. Entering into a franchise can see you dealing with sales contracts, policies and procedures provided by the franchisor, body corporate rules and regulations, and taxation; and this is all before taking on staff.

Engaging employees to assist in the operation of your franchise is one of the many responsibilities you have as a business owner. If you are acquiring a franchise and employing staff for the first time, or if you already have employees, there is plenty of helpful advice, information and resources available from the Fair Work Ombudsman (www.fairwork.gov.au).

The Fair Work Ombudsman (FWO) is an independent statutory agency established under the Fair Work Act 2009 (the Act). The FWO’s purpose is to promote harmonious, productive and cooperative workplace relations and ensure compliance with Commonwealth workplace laws. While we have always had the role of a time and wages regulator we also have a strong focus on proactive compliance and helping employers, large and small, to understand their workplace obligations and options.

We are committed to assisting all employers and employees work harmoniously and productively, and have produced a suite of template letters and forms, as well as fact sheets and Best Practice Guides. For a great number of matters that arise in the employment life-cycle, we have a template letter to assist - available at www.fairwork.gov.au/resources/templates. Our template letters include letters of engagement for fulltime, part-time and casual staff members, letters of probation, letters  issuing staff warnings and letters of termination. We understand that, although two workplaces in the same industry can be vastly different, there are common issues that will arise. To this end, we strive to educate individuals and organisations about  better ways of working and resolving disputes.

Recruiting and retaining good staff

According to a study undertaken by the Australian Human Resources Institute (AHRI) in 2007, the accommodation and food services industry has the highest staff turnover rate of all industries operating in Australia (40.3 per cent per annum). Some put this down to being just the nature of the industry, however good employment and dispute resolution practices can help you recruit and retain good employees.

Best practice tip: A big part of staff retention is employing the right person for the right job in the first place. When advertising for a new position it’s a good idea to define the vacancy in line with the classification description in the relevant award or  agreement. This will define parameters of a position from early on and will help you manage the expectations of the prospective employee.

Improving staff retention is good for business. Vedior Asia Pacific Employment Trends estimates that it can cost almost 150% of an employee’s salary to replace a skilled position . This obviously affects the financial bottom line of your business.  Attempting to resolve an issue with a good employee rather than letting them go can work in your favour. To assist with this issue, you can view the Managing Under Performance Best Practice Guide at www.fairwork.gov.au.

Employing inexperienced workers

Another thing to consider is that, as an employer or potential employer in the food services industry, it’s likely that you’ll be employing young and inexperienced workers. These workers can add benefit to a business’ morale and atmosphere with their energy and enthusiasm. As an employer, it’s important that you understand that, as enthusiastic as they may be, they are still inexperienced. It is up to you to ensure that your staff are aware of their rights and obligations in the workplace.

Best practice tip: When engaging inexperienced staff, give them a thorough run-down of what’s expected of them in their role in their first few shifts. This may include briefings on such things as how to request leave, who to contact when they can’t  come to work because they are sick, workplace health & safety requirements, rostering and other issues unique to your business. You will also need to provide all new starters with a Fair Work Information Statement available from  www.fairwork.gov.au/fwis. You can create your own checklist of what’s been covered and keep it with your employee records.

Remember, for some of your staff this may be their first job. Without help or guidance from their employer, a worker may not understand what is expected of them. Being proactive in managing your staff can prevent bad habits from setting in. You  can learn more about engaging young workers in our Best Practice Guide: An employer’s guide to employing young workers, available from www.fairwork.gov.au/resources/best-practice-guides/pages/default.aspx.

Understanding and meeting your obligations

One of the most important things for an employer is to ensure all staff are getting paid correctly. Most complaints we receive from the food services industry relate to underpayment of wages and entitlements such as penalty rates and overtime.  Paying staff from the correct industrial instrument (such as a modern award or enterprise agreement) is paramount. The award or agreement will establish minimum conditions, including things like rates of pay, penalties for working on weekends, and meal break entitlements. Adopting the incorrect award or agreement can result in your staff being underpaid or having certain entitlements such as overtime or penalty rates neglected. This can end with you having to back pay your staff and can seriously damage your business’ brand and reputation.

Modern awards, such as the Fast Food Industry Award 2010 or the Restaurant Industry Award 2010 may apply to a business in the food services industry. You can use our Award Finder, available on www.fairwork.gov.au, to ensure you’re applying the correct award. It is critical to your business that you have read your award or agreement and know what these conditions are. To assist employers in this industry better understand their obligations, at www.fairwork.gov.au/industries you can find specific information for the fast food, restaurant & cafes and licensed clubs industry sectors and more. These pages outline rights and entitlements under the relevant modern awards and include best practice tips and additional resources to assist  employers with compliance. As well as this, www.fairwork.gov.au/mybusiness has a wealth of information specifically for small to medium sized employers. On this page you will find a Fair Work Handbook which explains various elements of the Fair  Work Act as well as awards and agreements. This includes your pay slip and record keeping obligations, leave accrual, award and agreement interaction with the National Employment Standards, the Fair Work Information Statement, permitted deductions and more.

There is a lot you need to know and consider when operating a franchise business, however help is out there. Keeping a copy of the Fair Work Handbook with your other franchise policies and procedures will assist you and your managers in dealing  with employee enquiries relating to workplace laws and may help in resolving any issues that arise. If you do need further assistance understanding your rights and obligations under the Fair Work Act, you can contact us via www.fairwork.gov.au or  during business hours on 13 13 94. You should also speak with your franchisor to discuss the type of support that they can offer to ensure that you are well prepared to meet the demands of your business and your obligations to your workers.  Industry associations can also be a valuable source of information and advice.

Lynda McAlary-Smith is the Executive Director of the Education & Major Employers Branch at the Fair Work Ombudsman. Lynda leads the National Franchise Program focused on identifying ways to assist franchisors to better promote and support  franchisee compliance.

The Fair Work Ombudsman is an independent statutory agency created by the Fair Work Act 2009 that promotes harmonious, productive and cooperative workplaces. We provide free tools, information and advice to assist both employees and  employers about their workplace rights and responsibilities.

Contact the Fair Work Infoline on
Phone: 13 13 94
Web: www.fairwork.gov.au.